On March 7, 2022 Eagle Pharmaceuticals, Inc. (Nasdaq: EGRX) ("Eagle" or the "Company") reported financial results for the three and twelve months ended December 31, 2021 (Press release, Eagle Pharmaceuticals, MAR 7, 2022, View Source [SID1234609597]).
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Business and Recent Highlights:
Announced the commercial availability of its novel product, PEMFEXY (pemetrexed for injection), a branded alternative to ALIMTA. PEMFEXY is a ready-to-use liquid with a unique J-code and is approved in the United States to treat nonsquamous non-small cell lung cancer and mesothelioma. Eagle received approval from the U.S. Food and Drug Administration ("FDA") in February 2020 of its new drug application ("NDA") for PEMFEXY, following the settlement agreement of patent litigation with Eli Lilly and Company in December 2019. The agreement provided for a release of all claims by the parties and allows for an initial entry of PEMFEXY into the market (equivalent to approximately a three-week supply of ALIMTA utilization) on February 1, 2022, and a subsequent uncapped entry on April 1, 2022. The ALIMTA U.S. market totaled $1.2 billion for the 12 months ended December 31, 2021, as reported by Eli Lilly and Company
Commenced shipment of vasopressin on January 18, 2022 with 180 days of marketing exclusivity. Vasopressin, an A-rated generic alternative to Vasostrict, is indicated for use to increase blood pressure in adults with vasodilatory shock (e.g., post-cardiotomy or sepsis) who remain hypotensive despite fluids and catecholamines. U.S. sales of Vasostrict totaled $901.7 million for the 12 months ended December 31, 2021, as reported by Endo International plc.
AOP Orphan Pharmaceuticals GmbH, Member of the AOP Health Group, ("AOP Health"), with whom Eagle entered into a licensing agreement in August 2021, has engaged with the FDA to obtain alignment on the content and format of the pre-clinical and clinical data required to support an NDA seeking approval of Landiolol, a novel therapeutic, for the short-term reduction of ventricular rate in patients with supraventricular tachycardia, including atrial fibrillation and atrial flutter. Based on the FDA’s responses to AOP Health’s communications, Eagle remains on track to support AOP Health’s NDA filing for Landiolol in the second quarter of 2022.
1 The Company’s expectations with respect to the first quarter of 2022 are based on its estimates and assumptions as of March 7, 2022 and are subject to substantial uncertainty. The Company’s first quarter of 2022 is ongoing and not complete, and the Company’s expectations with respect to revenues, earnings per share and adjusted non-GAAP earnings per share for the first quarter of 2022 are estimates. Actual revenue, earnings per share and adjusted non-GAAP earnings per share for the Company’s first quarter of 2022 are subject to completion of the quarter as well as financial closing procedures for the period, and the actual and reported financial results for the Company’s first quarter of 2022 may materially differ. As such, the Company’s expectations with respect to the first quarter of 2022 are inherently unpredictable and actual results and outcomes could differ materially for a variety of reasons, including the factors discussed below under "Forward-Looking Statements".
* Adjusted non-GAAP net income, adjusted non-GAAP earnings per share, adjusted non-GAAP R&D expense and adjusted non-GAAP SG&A expense are non-GAAP financial measures. For descriptions and reconciliations of these non-GAAP financial measures to their most comparable GAAP financial measures, please see below and the tables at the end of this press release.
Financial Highlights
Fourth Quarter 2021
Total revenue for Q4 2021 was $42.3 million, compared to $49.9 million in Q4 2020, primarily reflecting lower product sales of BELRAPZO and RYANODEX and lower royalty revenue of BENDEKA, partially offset by higher product sales of TREAKISYM.
Q4 2021 net loss was $6.2 million, or $(0.48) per basic and diluted share, compared to net income of $8.1 million, or $0.62 per basic and $0.60 per diluted share, in Q4 2020.
Q4 2021 adjusted non-GAAP net income* was $11.2 million, or $0.87 per basic and $0.85 per diluted share, compared to adjusted non-GAAP net income* of $12.8 million, or $0.98 per basic and $0.96 per diluted share, in Q4 2020.
Cash and cash equivalents were $97.7 million, net accounts receivable was $41.1 million, and debt was $26.0 million as of December 31, 2021.
Full Year 2021
Total revenue for the 12 months ended December 31, 2021 was $171.5 million, compared to $187.8 million in 2020. 2020 included a $5.0 million milestone payment from SymBio Pharmaceuticals Limited for regulatory approval of TREAKISYM ready-to-dilute ("RTD") (250 ml) liquid bendamustine formulation.
Net loss for the 12 months ended December 31, 2021 was $8.6 million, or $(0.66) per basic and diluted share, compared to net income of $12.0 million, or $0.89 per basic and $0.87 per diluted share, in 2020.
Adjusted non-GAAP net income* for the 12 months ended December 31, 2021 was $34.4 million, or $2.64 per basic and $2.59 per diluted share, compared to $48.7 million, or $3.62 per basic and $3.54 per diluted share, in 2020.
From August 2016 through December 31, 2021, Eagle has repurchased $228.1 million of its common stock.
"With two important launches in early 2022, Eagle is off to a great start. The initial impressive revenue generated from vasopressin and PEMFEXY, each with significant periods of exclusivity, together with our royalties from bendamustine sales in Japan, position us to more than double our earnings this year. Based on early 2022 trends, we believe that our Q1 2022 earnings per share should approximate $4.00. Our pipeline is advancing as expected, and our balance sheet remains healthy. The period ahead will be exciting for us as we plan to deploy our cash to strengthen our product offerings and grow the company," stated Scott Tarriff, President and Chief Executive Officer of Eagle Pharmaceuticals.
Q4 2021 BELRAPZO product sales were $5.5 million, compared to $10.2 million in Q4 2020.
Q4 2021 RYANODEX product sales were $6.1 million, compared to $7.9 million in Q4 2020.
Royalty revenue was $26.2 million in the fourth quarter of 2021, compared to $27.0 million in the fourth quarter of 2020. BENDEKA royalties were $24.2 million in the fourth quarter of 2021, compared to $27.0 million in the fourth quarter of 2020.
Gross margin was 71% during the fourth quarter of 2021, as compared to 75% in the fourth quarter of 2020. The decrease in gross margin for the fourth quarter of 2021 was driven by revenue mix.
R&D expense was $3.8 million for the fourth quarter of 2021, compared to $9.4 million for the fourth quarter of 2020. The decrease was primarily due to the non-recurrence of development cost on vasopressin and lower spend on RYANODEX related projects. Excluding stock-based compensation and other non-cash and non-recurring items, adjusted non-GAAP R&D expense* during the fourth quarter of 2021 was $2.6 million.
SG&A expenses in the fourth quarter of 2021 totaled $20.3 million compared to $18.2 million in the fourth quarter of 2020. This increase was primarily related to employee related costs and consulting costs partially offset by a decrease in stock-based compensation expense. Excluding stock-based compensation and other non-cash and non-recurring items, fourth quarter 2021 adjusted non-GAAP SG&A expense* was $14.6 million.
Net loss for the fourth quarter of 2021 was $6.2 million, or $(0.48) per basic and diluted share, compared to net income of $8.1 million, or $0.62 per basic and $0.60 per diluted share, in the fourth quarter of 2020, as a result of the factors discussed above.
Adjusted non-GAAP net income* for the fourth quarter of 2021 was $11.2 million, or $0.87 per basic and $0.85 per diluted share, compared to adjusted non-GAAP net income* of $12.8 million or $0.98 per basic and $0.96 per diluted share in the fourth quarter of 2020.
Full Year 2021 Financial Results
Product sales decreased by $7.3 million in the year ended December 31, 2021, primarily driven by decreases in product sales of Bendeka by $4.3 million, coupled with decreases in Belrapzo product sales of $3.8 million, due to price decreases and Ryanodex product sales by $3.0 million, due to volume decreases. The decreased sales were partially offset by increases in product sales of $3.9 million for TREAKISYM.
Gross margin was 75% in 2021, as compared to 76% in 2020. The decrease in gross margin in 2021 was driven by revenue mix.
R&D expense increased to $51.3 million in 2021, compared to $30.8 million in 2020, primarily reflecting a $10.0 million upfront payment related to our license agreement with Combioxin SA for CAL02, a $5.0 million upfront payment related to our licensing agreement with AOP Orphan for Landiolol, and increases of $2.3 million in development costs for vasopressin, $2.1 million in employee related costs, and $1.6 million related to PEMFEXY launch preparedness and regulatory costs. Excluding stock-based compensation and other non-cash and non-recurring items, adjusted non-GAAP R&D expense* in 2021 was $32.5 million.
SG&A expenses decreased by $3.3 million to $75.3 million in 2021, compared to $78.6 million in 2020. The decrease primarily reflects lower stock-compensation expense and the non-recurrence of expense related to Tyme Technologies, Inc. ("Tyme"), partially offset by increases in external legal fees and employee related costs. Excluding stock-based compensation and other non-cash and non-recurring items, adjusted non-GAAP SG&A expense* in 2021 was $54.9 million.
Net loss for the year ended December 31, 2021 was $8.6 million, or $(0.66) per basic and diluted share, as compared to net income of $12.0 million or $0.89 per basic and $0.87 per diluted share for the year ended December 31, 2020, as a result of the factors discussed above.
Adjusted non-GAAP net income* for the year ended December 31, 2021 was $34.4 million, or $2.64 per basic and $2.59 per diluted share, compared to adjusted non-GAAP net income* of $48.7 million, or $3.62 per basic and $3.54 per diluted share, for 2020.
First Quarter 2022 Expected Revenue and EPS1
Revenue for the first quarter 2022 is expected to be in the range of $120 million – $130 million.
Adjusted non-GAAP earnings per share* for the first quarter 2022 is expected to be in the range of $3.80 – $4.10.
2022 Full Year Expense Guidance
Adjusted non-GAAP R&D expense* is expected to be in the range of $46 million to $50 million, as compared to $32.5 million in 2021.
Adjusted non-GAAP SG&A expense* is expected to be in the range of $54 million to $58 million, as compared to $54.9 million in 2021.
Liquidity
As of December 31, 2021, Eagle had $97.7 million in cash and cash equivalents plus $41.1 million in net accounts receivable, and $26.0 million in outstanding debt. Therefore, as of December 31, 2021, Eagle had net cash plus receivables of $112.8 million.
In the fourth quarter of 2021, Eagle purchased $8.6 million of its common stock as part of its current $160.0 million Share Repurchase Program. From August 2016 through December 31, 2021, Eagle has repurchased $228.1 million of its common stock.
Conference Call
As previously announced, Eagle management will host its fourth quarter 2021 conference call as follows:
A replay of the conference call will be available for one week after the call’s completion by dialing 800-839-0866 (US) or 402-220-0662 (International) and entering conference call ID EGRXQ421. The webcast will be archived for 30 days at the aforementioned URL.